Athabasca shares tumble in market debut

Thu Apr 8, 2010 9:45pm EDT
 
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CALGARY, Alberta (Reuters) - Athabasca Oil Sands Corp had a rough market debut on Thursday, its shares sinking 6 percent in a wave of selling as oil and gas prices weakened.

Stock in Athabasca, whose initial public offering was the largest in Canada in more than a decade, fell C$1.10 to C$16.90 on heavy volume of 34 million shares in its first session on the Toronto Stock Exchange. That gave the company a market value of C$6.76 billion ($6.76 billion).

The shares were offered at C$18 each in the IPO, worth more than C$1.3 billion ($1.3 billion) and possibly as much as C$1.5 billion if the underwriters' overallotment option gets exercised.

Chris Feltin, an analyst with Macquarie Securities Canada, said it appeared Athabasca was swept up in the overall market activity, rather than moving on its own fundamentals.

Most issues in the TSX energy subgroup fell early in the session and gas prices sank. The group recovered by the end of the day.

U.S. oil fell 49 cents to $85.39 a barrel on a stronger U.S. dollar and gas sank 2.7 percent to $3.909 per million British thermal units on a larger than expected rise in inventories.

Athabasca has two oil sands projects in northern Alberta that it is developing in a venture with state-owned PetroChina.

The company floated the stock -- at about double the worth of its initial estimate -- just as Canada's oil sands sector recovers from the recession amid rising crude prices and a host of recently restarted project plans.

(Reporting by Jeffrey Jones; editing by Rob Wilson)